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EU Analysis:
Levels of interest: Demand: Daily/Weekly: 1.1639 Supply: short-term: 1.2150, 1.2205, 1.2260, 1.2300, 1.2356, 1.2375, 1.2425, 1.2500, 1.2530, 1.2600
Background: The fundamentals of the Euro remains weak. Apart from the upcoming general elections in Greece and the UK which will result in volatility along the way, the NFP results reveal a significant growth in the US economy that further weakens the EU pair.
Prices pushed very hard on the NFP data release last Friday but failed to take out the lows and pushed back to 1.1845 before staling for the week. Prices gapped open this morning and went higher to 1.1870 before retracing. Based on the order book, there is a significant volume of traders trapped short below the 1.1850 level. Possible short stop orders are at 1.1900, 1.1950, 1.2000 and possible long take profits at 1.1900 and 1.2000 The "fresh" demand orders stacks at 1.1760- 1.1775 but these are just retail orders that can easily be absorbed. SM is likely to continue selling pressure up to the 1.1785 level or lower in a "sentiment" move to induce new short positions before reversing back upwards to fade them, possibly to the 1.1900 or higher to 1.2000. The short-term SM cycle should look to be upward as SM has likely taken profits and looks to reload short positions. However, any break and close below the current low will negate the analysis.
Prices pushed very hard on the NFP data release last Friday but failed to take out the lows and pushed back to 1.1845 before staling for the week. Prices gapped open this morning and went higher to 1.1870 before retracing. Based on the order book, there is a significant volume of traders trapped short below the 1.1850 level. Possible short stop orders are at 1.1900, 1.1950, 1.2000 and possible long take profits at 1.1900 and 1.2000 The "fresh" demand orders stacks at 1.1760- 1.1775 but these are just retail orders that can easily be absorbed. SM is likely to continue selling pressure up to the 1.1785 level or lower in a "sentiment" move to induce new short positions before reversing back upwards to fade them, possibly to the 1.1900 or higher to 1.2000. The short-term SM cycle should look to be upward as SM has likely taken profits and looks to reload short positions. However, any break and close below the current low will negate the analysis.
EU long levels: 1.1780, 1.1750, 1.1725, 1.1639
EU short levels: 1.1900, 1.2025, 1.2150, 1.2205, 1.2260, 1.2300GU Analysis:
GU: Weekly-The candle is an above average spread (285pips) bear closing 1/3 off the low on low vol>2weeks. The candle close and volume suggests more downside. Day- The candle is a normal spread (98pips) bull closing just off the high on low vol>1day. The candle close and volume suggests more upside.
Demand: Weekly/Daily: 1.4870 - 1.4812, 1.4229 Supply: Short term: 1.5400, 1.5470, 1.5500, 1.5540, 1.5600
Background: NFP results are good that should result in continued USD strength, this combined with UK poor economic performance and political uncertainty keeps the GBP weak.
Prices gapped up today on the open removing weak shorts and making fresh highs to 1.5192 before stalling and reversing. There is no demand level to trade from until the 1.4850 level to the 1.4812 pivot. There are no significant order stacks till 1.4990 - 1.5000 The order book shows a significant volume of traders trapped short and using the current sentiment, SM is likely to maintain selling pressure induce fresh shorts to around the 1.5080 or lower before resuming the upward move to around the 1.5200 key level where there are both stops and fresh breakout orders for a possible stall and reverse. The longer bias is DOWN and any long position with the SM cycle is corrective and temporary.
GU long levels: 1.5080, 1.5030, 1.5000, 1.4938, 1.4870, 1.4812
Posted at 4.05 am EST
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